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S.R.O. 330(I)/96, Islamabad, dated 29th June, 1996.- WHEREAS in partial modification to this Ministry's Notification No. S.R.O. 1245(I)/82, dated the 12th December, 1982, the following Protocol to convention between the Government of the Islamic Republic of Pakistan and Kingdom of the Netherlands for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income has been entered between the two Governments;

NOW, THEREFORE, in exercise of the powers conferred by section 163 of the Income Tax Ordinance, 1979 (XXXI of 1979), the Federal Government is pleased to direct that the provisions of the said Protocol shall take effect in Pakistan from the 4th day of October, 1982.

PROTOCOL

At the moment of signing the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, this day concluded between the Islamic Republic of Pakistan and the Kingdom of the Netherlands, the undersigned have agreed that the following provisions shall form an integral part of the Convention.

I. AD ARTICLE 4

An individual living aboard a ship without any real domicile in either of the States shall be deemed to be a resident of the State in which the ship has its home harbour.

II. AD ARTICLE 7

In the application of paragraph 3 of Article 7 no deduction shall be allowed in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission, for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the permanent establishment. Likewise, no account shall be taken, in the determination to the profits of a permanent establishment, for amounts charged (otherwise than towards reimbursement of actual expenses), by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission, for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the head office of the enterprise or any of its other offices.

III AD ARTICLE 8 AND 11

Interest on funds directly connected with the operation of ships or aircraft in international traffic shall be regarded as income from the operation of such ships or aircraft; the provisions of Article 11 shall not apply in relation to such interest.

IV. AD ARTICLE 10

The provisions of paragraph 2(a) of article 10 shall not apply if the company which is a resident of the Netherland suffers Netherlands company tax on the dividends which it receives from the company which is a resident of Pakistan. In such a case, the provisions of paragraph 2(b) of Article 10 shall apply.

V. AD ARTICLES 10, 11 AND 12

Where tax has been levied in excess of the amount of tax chargeable under the provisions of Articles 10, 11 and 12, applications for the restitution of the excess amount of tax have to be lodged with the competent authority of the State having levied the tax, within a period of three years after the expiration of the calendar year in which the tax has been levied.

VI. AD ARTICLE 12

Payments received as a consideration for technical services, including studies or surveys of a scientific, geological or technical nature, or for engineering contracts including blue prints related thereto, or for consultancy or supervisory services shall be deemed to be payments to which the provisions of Article 7 or Article 14 apply.

VII. AD ARTICLE 14

The competent authorities of the States may be mutual agreement adapt the amount mentioned in subparagraph 1 of Article 14 of the Convention is financial and economic developments give rise to such adaptation.

VIII. AD ARTICLE 22

After a period of 10 years following the entry into force of the Convention the competent authorities shall consult each other in .order to determine whether it is opportune to amend the provisions of paragraph 4 of Article 22 of the Convention.

IN WITNESS whereof the undersigned, duly authorized thereto, have signed this Protocol.

DONE at The Hague, this 24th day of March, 1982 in duplicate, in the Netherlands and English languages, both texts being equally authentic.

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